Correlation Between DIC Holdings and Southern Rubber
Can any of the company-specific risk be diversified away by investing in both DIC Holdings and Southern Rubber at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining DIC Holdings and Southern Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DIC Holdings Construction and Southern Rubber Industry, you can compare the effects of market volatilities on DIC Holdings and Southern Rubber and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in DIC Holdings with a short position of Southern Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIC Holdings and Southern Rubber.
Diversification Opportunities for DIC Holdings and Southern Rubber
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DIC and Southern is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding DIC Holdings Construction and Southern Rubber Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Rubber Industry and DIC Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on DIC Holdings Construction are associated (or correlated) with Southern Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Rubber Industry has no effect on the direction of DIC Holdings i.e., DIC Holdings and Southern Rubber go up and down completely randomly.
Pair Corralation between DIC Holdings and Southern Rubber
Assuming the 90 days trading horizon DIC Holdings Construction is expected to under-perform the Southern Rubber. In addition to that, DIC Holdings is 1.17 times more volatile than Southern Rubber Industry. It trades about -0.07 of its total potential returns per unit of risk. Southern Rubber Industry is currently generating about 0.13 per unit of volatility. If you would invest 1,290,000 in Southern Rubber Industry on October 26, 2024 and sell it today you would earn a total of 175,000 from holding Southern Rubber Industry or generate 13.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DIC Holdings Construction vs. Southern Rubber Industry
Performance |
| Timeline |
| DIC Holdings Construction |
| Southern Rubber Industry |
DIC Holdings and Southern Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DIC Holdings and Southern Rubber
The main advantage of trading using opposite DIC Holdings and Southern Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIC Holdings position performs unexpectedly, Southern Rubber can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Southern Rubber will offset losses from the drop in Southern Rubber's long position.| DIC Holdings vs. Long An Food | DIC Holdings vs. Sao Ta Foods | DIC Holdings vs. Tri Viet Management | DIC Holdings vs. Transport and Industry |
| Southern Rubber vs. FIT INVEST JSC | Southern Rubber vs. Damsan JSC | Southern Rubber vs. An Phat Plastic | Southern Rubber vs. APG Securities Joint |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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